The “Frugal” Mindset Will Always Defeat You

I’ve been having an ongoing conversation with a business owner over the past few months.

He had emailed me awhile back outlining ongoing issues he’s had with people in our industry who call themselves virtual assistants.

He stated that he’s hired and fired many and nothing ever seems to work out for him.

Normally, I don’t spend my time and energy trying to convince those who will never get it.

But this was a very nice, genuine fellow, not a crank or someone just emailing to complain.

He was sincerely reaching out for some help and even though he’d had many unsatisfactory experiences, he wasn’t ready to completely abandon all hope of ever finding a competent, reliable administrator to work with.

Plus, I’m always interested in better understanding how business owners think in these cases because it helps me identify areas where those in our industry are giving them inadequate or confusing messages and allowing them to form expectations that will prevent the kind of desired outcomes and mutually beneficial relationships from happening.

So that you have a little bit of context, here are a few excerpts of what he shared with me:

“It’s my opinion there are more virtual assistants who promise the moon and then grossly under-deliver, which disappoints. It’s easy to say I’m patient, but I also run a business. If a VA will charge the kind of rates they want, they should come prepared (and many do not) and also be able to say “I don’t do that part” of the business or task you need accomplished.”

“I have worked with various VAs for five years. Spent a lot of money, didn’t really get too far. I’ve had enough experience where I can say that many VAs do not have the skills they advertise, do not have the expertise with products and resources they say they do; rarely complete work on time; have a difficult time estimating how much will be involved in a project, which slows everything down; suffer from the loneliness factor so when they get someone on the phone, it becomes a gabfest… and I’m paying! They are in constant education mode meaning they spend all weekend getting up to speed on a tool you need them to use (which they professed they had working knowledge of) and so you become their guinea pig. I’ve also found that if you are somewhat flexible in deadlines, a nice guy or easy going, the other clients of the VA will soon take (re-allocate) much of your VA’s prime working time.”

“I had a wonderful VA who was (literally) dirt cheap and fantastic. I’m pretty certain I found her on Guru.com. She charged $10/hour. She was amazing and very trustworthy. Out of the blue one day she called, said she is going to have to drop me because she found someone else who was willing to pay more and give her significantly more work. I would have paid her more, but she then said she would need $30/hr… triple!”

“About a year ago, I interviewed a VA who lived outside Chicago. I swear to God, I would have picked up and moved my entire business to Illinois, she was THAT impressive. She then told me her rate was $75/hr. That ended the entire discussion. She could have been sliced bread (and probably is), but for $75/hr?”

This business owner ended up advertising piecework and projects on Craigslist for $8 and $9/hr, but admitted he has to wade through a lot of wacky replies and still has a boatload of work he puts off daily.

I pointed out that while he was finding some help this way, this obviously wasn’t an ideal alternative since he still wasn’t getting his needs met and unproductively wasting enormous amounts of time and energy on this stuff, which he conceded was the case.

We talked at some length about all of this, with some very clear themes emerging and getting in his own way with this “cheap” mentality.

Besides advising him to hire for support, not piecemeal transactions, and giving him some tools and information for helping him make better choices and weed out those calling themselves VAs who really don’t have the skills and qualifications, part of what I suggested to him was this:

You had a wonderful administrative partner who (in your words) was “dirt cheap and fantastic.” This “‘dirt cheap” thinking will always defeat you. Unfortunately, it’s a personal problem that only you can choose to change or not. All I can tell you is that you simply are not going to get anything worthwhile for “‘dirt-cheap.”

It’s a flawed concept doomed to fail because no business owner can afford to stay in business being “dirt cheap.” Business cannot happen unless both the client and the provider have their needs met. In this case, nobody running a business (including those of us in the administrative support business) can be dirt cheap and have her profitability and income needs met. It forces her to take on more clients in order to make ends meet, which in turn, causes her to become overwhelmed in work. Yet what she’s earning in piling on more clients and more work still doesn’t adequately cover all the time and energy required for her to keep up and provide any reliably consistent level of professional support to anyone. In fact, the more work and clients she piles on, the LESS money she makes exponentially and the less effective and productive she becomes. Ultimately, something simply has to give. It’s inevitable. So what happens is, once she realizes she simply can’t be dirt-cheap AND fantastic, and begins to recognize her true value, she necessarily MUST increase her fees and move on to clients who recognize the value and are happy to pay her more appropriate professional-level fees — exactly as you experienced with the “amazing and trustworthy” person you lost.

My advice is to stop begrudging this great administrator her fees. If you found these two people who were fantastic and impressive, they are worth every penny for the time, headaches and work they save you from, the ability they give you to get more done and move forward more quickly than you could otherwise, not to mention the ease, convenience and peace of mind you’d have working with someone you feel is competent and trustworthy.

This guy was being cheap, but part of the reason for this was because these women were calling themselves “virtual assistants.”

“Assistant” is a term of employment, not business. When you are in business, you are not anyone’s assistant.

People only understand the word “assistant” one way: employee. That’s because “assistant” is a term of employment, not business. When you are in business, you aren’t anyone’s assistant.

This is why this fellow (and thousands of other clients) come to the table expecting to pay peanuts: they don’t understand the correct nature of the relationship; they think they are hiring some kind of subservient worker instead of a service-based business. This wrong perception — due to the very term “virtual assistant” — predisposed them to the cheapskate mentality.

All of this goes for people in our industry as well.

If you are constantly expecting everyone and everything else to be free or cheap, business is going to be that much harder for you.

If you want to attract clients who value you and happily pay what you are worth, you have to value and respect others in the same manner when it is you who is in the client/customer position.

It’s a laws-of-attraction type thing, if that helps you understand this better.

If you are in the habit of devaluing others, you will continue to be devalued by would-be clients as well. If you can’t operate with a value mindset yourself, you aren’t going to be able to attract value-minded clients, must less be able to articulate your value in any meaningful way to them.

You also do yourself no favors calling yourself a “virtual assistant.” That term negatively shapes clients’ understanding about the nature of the relationship and predisposes them to the cheapskate mentality (i.e., when they think you are some kind of employee/worker, they expect to be paying employee-level peanut wages). Changing your terminology will powerfully change these perceptions for the better.

DANIELLE KEISTER is an industry mentor, business catalyst and founder of the Administrative Consultants Association. I help women in the administrative support profession put their business britches on — because when you run a business, you aren't anyone's assistant. I'm on a mission to show you how to kick business butt, get better clients and start making the money you and your family deserve. Subscribe to the blog for more of my straight-talking, no-nonsense brand of business-building savvy and insights every week.

Someone needs to tell him that you simply can’t buy a Bentley for $200!! Maybe that will get you an old beat up clunker but it’s not going to be reliable!! 😉 “Cheap” is a relative term, and I think that $35/hr for a VA that can be reliable and deliver what she promises, when she does, who he has already worked with and knows she is capable, is a super sweet deal! The VA whom he said he would move to Illinois just to do business, but the fact that she was $75/hr… so, what if the time she freed up for him led him to take his business to the next level…or next 2 levels, and he profited triple-fold off of the investment into hiring her!? I guess he doesn’t see that. And THAT is the point! That is what we are supposed to do for these business owners–allow them to shine!
So, unless he gets over his thrifty mentality at least when it comes to VAs, he will never find what he’s looking for.

This is why I advise people to not to use words and terms like “virtual assistant” and “interview” — because those are terms of employment, not business. They don’t belong in any proper business conversation.

Clients don’t “interview” us (and don’t let them think of it those terms; you shape their thinking by how you craft this message on your website). For example, we offer prospective clients consultations where we can ask them questions about their business, needs, challenges and goals so that we can determine whether or not we can help them, where our support can be best leveraged in their business, and whether or not there is a mutual fit for moving forward.

Thank you so much for reminding us of our worth. I am confident with the rates I will establish with my clients and I won’t take it personal if a potential client decides not to work with me because they may feel my rates are too high. I have carefully evaluated my skills and will not take anything less than my worth.

It’s been interesting reading through this business owner’s complaints. Let me tell you, I think there’s a lot of truth in what he says; although he’s very harsh in his assessment of VAs in general. But as you, Danielle, know so well, a lot of this fellow’s problems are perceptional.

Consider this for a second – VA industry explosion coincided with the recession. Many VAs got started in business as a direct result of being laid off, being unable to find a job and having to pay their bills. It helps that VA industry has such low barriers for entry – costs virtually nothing to get started. So for some VAs virtual assistance and, in general, business ownership, are temporary stop-gap solutions. Nothing wrong with that, but this business owner needs to recognize the reality of things.

Qualifications and skills – it’s true that many VAs’ claims to expertise are a bit exaggerated. I don’t think it’s done out of lack of ethics or whatnot. Here’s the problem – true expertise comes with experience, with time, with clients, and with mistakes. On the other hand, the less hands-on experience you have, the more of an expert you might see yourself (since things tend to seem very simple on the surface).

Again, lack of previous experience leads to problems with estimating project demands (time, resources, etc). But this can happen even to a more experienced VA when she starts working with a new client or a new type of project/service.

But this kind of misunderstanding can be resolved/avoided very easily with a small pilot project.

As for the rates… I don’t think there’s anything wrong with looking for a cheap solution as long as you understand that there are certain trade-offs. It is also unrealistic to expect that a “great” VA will continue working for peanuts forever.

Now, here’s what I think this business owner needs:

1. Put some basic project and vendor management mechanisms in place that would reduce his [mostly preventable] negative experiences. Or he can contract a project manager to help him out.

2. Add the cost of his own time of handling piece-meal projects plus the opportunity costs to the “dirt cheap” rates for a REAL estimate.

3. Either adjust his budget or his expectations regarding the level of expertise, skill set, and VA availability.

I absolutely agree with him in his assessment of VAs in general. It’s not negative; he’s speaking the truth.

The problem is that the exploiters out there who are making money off these people; they’re the ones drawing all these unqualified, unskilled people to the industry who really have no business taking money from any client.

These exploiters are selling crap to these people, and the way they get into their pocketbooks is by telling them anyone can do this work, it doesn’t take anything more than a computer, internet connection and 30 days, “you, too, can be a VA,” “Be a VA in 30 days,” yada yada yada.

They don’t care about the quality or reputation of the profession or having any standards because the more people they have to sell to, the more money they stand to make. They don’t care about the reputation of the industry or the clients who pay for our support; they’re only in it to make money off these people.

So we end up with all these very poorly skilled (if they have any skill at all), unqualified people with little or no administrative experience or background slapping up websites mixing and mingling with those who really are professionally qualified.

So one part of helping this fellow is giving him a better way to discern the differences so that he can hire a truly skilled administrative expert and not someone who simply bought someone’s VA-in-a-Box kit. One of those is steering clear of anyone who calls themselves a virtual assistant.

What’s also happened with this fellow is that he got burned a few times, which understandably made him that much more leery about paying anyone any kind of professional rates. Those experiences fueled his tendency toward “cheapness” and in the end, it only served to worsen his situation, not help it.

The other part of his problem is the whole project thing.

Administrative support is not a project-oriented one-time transaction. Administrative support is a partnership, a relationship. You can’t outsource a partnership or have a relationship managed by a third party.

Plus, that only introduces yet another layer of complexity, something he doesn’t need.

I don’t support the idea of small sample projects. You can’t sample a relationship and it’s a waste of the Administrative Consultant’s time.

You either commit to a relationship or you don’t. And the way you help clients commit is not by “auditioning” or giving out sample work, but by demonstrating competence and reliability and qualification through all your other interactions with a prospect: through your website, your writing, your communication, your follow-thru, your consultation process… EVERYTHING.

THOSE are the things that let clients “sample” you and instill the trust and confidence they need to commit.